Legal Aid Generates 11% Economic Gain

In March of 2015, the Tennessee Bar Association released a report entitled, Economic Impact of Civil Legal Aid Organizations in Tennessee. The report documents the financial value of legal aid. “The study found that Tennessee’s legal aid organizations produce over $11.20 in economic impact for every dollar of funding they receive.”

I have been thinking about the issue of “access to justice” and the rhetoric that surrounds it. Access to justice is infrequently defined but often referenced. The phrase is often used in the context of reporting and debates concerning whether the poor have sufficient access to a lawyer’s services. The lack of access to justice is often measured by quantifying the number of people representing themselves (pro se) in court. This is a rather narrow and somewhat presumptuous way of thinking about access to justice. It should also be borne in mind that the decision not to seek legal advice does not always equate with diminished access to justice. Studies confirm that people can and do turn to non-legal avenues to solve everyday problems. The modern vision of access to justice reform captures and encourages these diverse pathways to redress.[1]

There is a lot of speculation that alternative business structures (ABSs) and new types of legal practitioners (i.e. LLLTs) will solve the access to justice gap. These are in fact not practical solutions for access to justice, but rather market based solutions that relate to principles of competition and consumer choice.

While it seems everyone is focused on efforts that will likely yield little to no value for those who presently have no access to justice, the areas that are most effective in addressing access are all but ignored, to wit: pro bono and legal aid.

One of the reasons cited for overlooking legal aid as a solution is the limited funding for these programs, which is why I find the Tennessee study so interesting. According to that study, investing in legal aid actually has an 11% rate of return, far greater than many other investments. For every dollar of funding invested into legal aid results in a $11.21 economic impact.

The study found that in 2013 alone, Tennessee legal aid generated $188.6 million in benefits and savings. It classifies these benefits into three categories: $64.3MM in benefits to clients of legal aid and their families, $81.7MM for the economic multiplier effect, and $42.6MM in cost savings for the community. Monetary benefits to legal aid clients include income from child support, Medicaid or Medicare benefits, social security and disability benefits, and other income that would have been unrealized without legal assistance. This “income is used to pay for daily necessities such as food, rent, electricity, and transportation; for access to medical care; and for relief from debt that threatens to drag them further into poverty.” The economic impact on communities, including the economic multiplier effect, results from federal dollars coming into the state for legal aid that would not have entered the local economy otherwise. Cost savings for the community includes reducing problems that are costly to everyone, such as homelessness and domestic violence.

There are obviously additional benefits of legal aid that cannot be measured in dollars and cents. “Representation by civil legal aid advocates fulfills one of our society’s most basic promises: Equal Justice Under Law.”

We cannot afford to ignore the necessity of legal aid and pro bono, as both are the most effective way of addressing access to justice deficiencies. We cannot afford to resign ourselves to the fact that legal aid is underfunded, as underfunding is an issue of priorities. Priorities are politically influenced and can be changed. We cannot expect market-based, for-profit activities to be the answer for access to justice for the poor. The poor have no money, and for-profit markets require money in order to function.

If legal aid can generate $188.6MM in benefits and savings in Tennessee in just one year, what can it accomplish if properly funded nationally? Legal aid is an investment in our communities and an important tool in closing the justice gap.

[1]See my previous posts on legal aid and access to justice here and here, which cite research out of Canada and Harvard.